A Joint Control Model Based on Emission Rights Futures Trading for Regional Air Pollution That Accounts for the Impacts on Employment

Shijie Wang, Laijun Zhao, Yong Yang, Chenchen Wang, Jian Xue, Xin Bo, Deqiang Li and Dengguo Liu
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Shijie Wang: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
Laijun Zhao: Sino-US Global Logistics Institute, Shanghai Jiao Tong University,1954 Huashan Rd., Shanghai 200030, China
Yong Yang: School of Arts and Sciences, Shaanxi University of Science & Technology, University Park of Weiyang District, Xi’an 710021, China
Chenchen Wang: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
Jian Xue: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
Xin Bo: Appraisal Center for Environment and Engineering, Ministry of Environmental Protection, Beijing 100012, China
Deqiang Li: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
Dengguo Liu: School of Automotive Studies, Tongji University, Shanghai 201804, China

Sustainability, 2019, vol. 11, issue 21, 1-17

Abstract: To reduce air pollutant control costs and solve the problem of decreased employment caused by air pollution control, we established a double-objective optimization Joint Control Model (JCM) based on emission rights futures trading. The JCM calculates the spot price of emission rights, classifies regions in the trading market for emission rights into buyers and sellers, and calculates the optimal cooperative pollution abatement quantity. Compared with a non-cooperative control mode, the JCM generated benefits of US$2485.19 × 10 6 . We then used a Game Quadratic Programming (GQP) method to distribute the benefits, and applied the JCM to a case study of the abatement of sulfur dioxide in China’s Shanxi, Henan, and Shaanxi provinces. We found that: (i) Compared with a JCM that does not account for employment, employment under the JCM increased by 3.20 × 10 3 people, and the pollution control cost decreased by US$11.20 × 10 6 under the JCM that considered employment. The effect of the latter model is better than that of the former. (ii) Employment under the JCM increased by 18.80 × 10 4 people compared with that under a territorial control mode, reducing the cost by US$99.73 × 10 6 . The JCM is helpful for all participating regions to balance environmental and livelihood issues in the process of air pollution control to achieve sustainable development.

Keywords: joint control; employment; pollution control cost; emission rights futures; Game Quadratic Programming method (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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